Jyoti and Surya Life Insurance Signed MoU For Merger; Swap Ratio To Be Finalised Later
Mon, Jun 27, 2022 12:43 PM on Merger/Acquistion, Latest,
To raise the paid-up capital to Rs 5 Arba, Surya Life Insurance Company Limited (SLICL), and Jyoti Life Insurance Company Limited (JLI) have signed a Memorandum of understanding (MoU) of the merger. Yesterday, the 318th and 109th board meetings of SLICL and JLI have passed the agenda for merger between the two companies. Hence around 5 PM the Chairman of SLICL, Mr Keshav Prasad Bhattarai and the Chairman of JLI Mr Nand Kishor Sharma signed a preliminary agreement of merger with each other.
Since the Insurance Board had issued a directive instructing the insurance companies to increase their paid-up capital, insurance companies have started signing merger agreements with each other.
Earlier, on the same grounds, three life insurance companies, Union Life Insurance Co Ltd (ULI), Gurans Life Insurance Co Ltd (GLICL), and Prime Life Insurance Co Ltd (PLIC), signed a merger agreement aimed at strengthening the company's capital base. That was the first merger in the country's life insurance sector, having the highest paid-up capital which stood at Rs. 7.01 Arba (Post Merger).
At present, non-life insurance companies should have a minimum paid-up capital of Rs 1 Arba, and life insurance companies should have a minimum paid-up capital of Rs 2 Arba.
The board has directed that the non-life insurance companies should raise the minimum limit of paid-up capital to Rs 2.5 Arba and life insurance companies should increase it to Rs 5 Arba by Chaitra 2079.
| Particulars (Amount' 000) | JLI -Q3 FY 78/79 | SLICL--Q3 FY 78/79 |
|---|---|---|
| Paid Up Capital | 2,420,000 | 2,550,282 |
| Reserve and Surplus | 566,848 | 594,687 |
| Insurance Fund | 5,661,827 | 13,355,888 |
| Contingent Fund | 88,714.10 | 152,839.00 |
| Net Premium | 2,493,867 | 3,583,644 |
| Income from Loan against policy | 26,764 | 102,450 |
| Income from Investment, Loan and others | 330,371 | 718,037 |
| Claim Payment (Net) | 188,607 | 720,993 |
| Net Profit | 206,509 | 150,695 |
| No of Policies | 91,351 | 381,877 |
| EPS (In Rs.) | 11.38 | 7.88 |
| Net Worth per Share (In Rs.) | 127.09 | 120.31 |
| Qtr End PE Ratio | 51.67 | 84.15 |
| Qtr End Market Price | 587.9 | 663 |
Key Highlights of the Merger Between SLI & JLICL
- Currently, Surya Life has a paid-up capital of Rs 2.55 Arba, and Jyoti Life has a paid-up capital of Rs 2.42 Arba. After the merger, the paid-up capital of the two companies will reach Rs 4.97 Arba.
- This merger will increase the profitability of the company. Likewise, the combined net premium of the company will come to Rs. 6.07 Arba.
- Immediately after the joint operation, the insurance company will have 227 branches. At present, JLI has a total of 127 branches all over Nepal and SLICL has 101 total branches.
Trading of both SLICL and JLI is halted in the secondary market from today. The last traded price of JLI stands at Rs 359 and of SLICL is Rs 387 per share.
There is a total of 12 listed life insurance companies, out of which trading of 5 companies is halted due to the merger process.
